The contribution margin ratio always decreases when: A.the fixed expenses increase. B.fixed expenses decrease. C.variable expenses...
The contribution margin ratio always decreases when:
A.the fixed expenses increase.
B.fixed expenses decrease.
C.variable expenses as a percentage of net sales increase.
D.variable expenses as a percentage of net sales decrease.
Homework Answers
Answer
- The correct answer is Option ‘C’ Contribution margin ratio decreases when variable expenses as a percentage of Net Sales increases.
- This is because Sales – variable Cost = Contribution
margin.
OR
Sales – variable Cost % of Sale = CM Ratio. - Example, Variable cost = 45% of sale, then
Sales – VC = CM
100% - 45% = 55% = Contribution margin ratio.
Now, if Variable increases, say to
50%, CM Ratio would be:
100% - 50% = 50%, hence CM ratio would decrease from 55% to 50%
when Variable expense increases as a % of sale.
Add Answer to:
The contribution margin ratio always decreases when:
A.the fixed expenses increase.
B.fixed expenses decrease.
C.variable expenses...
3. The contribution margin ratio increases when A) fixed costs increase. B) fixed costs decrease C)...
3. The contribution margin ratio increases when A) fixed costs increase. B) fixed costs decrease C) variable costs as a percentage of sales decrease. D) variable costs as a percentage of sales increase.
Which of the following statements about cost-volume-profit analysis is true? To increase the contribution margin ratio,...
Which of the following statements about cost-volume-profit analysis is true? To increase the contribution margin ratio, a manager should decrease fixed cost. The contribution margin ratio represents the percentage of sales revenue available to contribute towards covering variable and fixed costs. At the breakeven point, total sales revenue equals total costs. If a company expands operations outside of its relevant range, variable cost per unit could change, but total fixed costs will always stay constant.
Which of the following statements about cost-volume-profit analysis is true? To increase the contribution margin ratio,...
Which of the following statements about cost-volume-profit analysis is true? To increase the contribution margin ratio, a manager should decrease fixed cost The contribution margin ratio represents the percentage of sales revenue available to contribute towards covering variable and fixed costs If a company expands operations outside of its relevant range, variable cost per unit could change, but total fixed costs will always stay constant ОО At the breakeven point total sales revenue equals total costs
Jilk Inc.'s contribution margin ratio is 60% and its fixed monthly expenses are $42,500. Assuming that...
Jilk Inc.'s contribution margin ratio is 60% and its fixed monthly expenses are $42,500. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are $127,000? Escareno Corporation has provided its contribution format income statement for June. The company produces and sells a single product. Sales (8,400 units) Variable expenses Contribution margin Fixed expenses Net operating income $764,400 445,200 319,200 250,900 $ 68,300 If the...
1.What is the contribution margin per unit? 2.What is the contribution margin ratio? 3.What is the...
1.What is the contribution margin per unit?
2.What is the contribution margin ratio?
3.What is the variable expense ratio?
4.If sales increase to 1,001 units, what would be the increase
in net operating income?
5.If sales decline to 900 units, what would be the net
operating income?
6.If the selling price increases by $2.50 per unit and the
sales volume decreases by 100 units, what would be the net
operating income?
7.If the variable cost per unit increases by $1.50,...
Multiple Choice Question 43 The contribution margin ratio is O sales divided by fixed expenses. contribution...
Multiple Choice Question 43 The contribution margin ratio is O sales divided by fixed expenses. contribution margin divided by sales. O sales divided by variable expenses. sales divided by contribution margin.
Jilk Inc.'s contribution margin ratio is 62% and its fixed monthly expenses are $49,000. Assuming that...
Jilk Inc.'s contribution margin ratio is 62% and its fixed monthly expenses are $49,000. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are $140,000?
Balonek Inc.'s contribution margin ratio is 57% and its fixed monthly expenses are $41,000. Assuming that...
Balonek Inc.'s contribution margin ratio is 57% and its fixed monthly expenses are $41,000. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are $112,000?
Creswell Corporation's fixed monthly expenses are $29,000 and its contribution margin ratio is 56%. Assuming that...
Creswell Corporation's fixed monthly expenses are $29,000 and its contribution margin ratio is 56%. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are $95,000? Multiple Choice $12,800 $53,200 $24.200 $66,000
Jilk Inc.'s contribution margin ratio is 60% and its fixed monthly expenses are $51,000. Assuming that...
Jilk Inc.'s contribution margin ratio is 60% and its fixed monthly expenses are $51,000. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating Income in a month when sales are $144,000? Multiple Choice Ο Ο 586,400 Ο Ο 58, Ο 535,400 Ο Ο $93,000 Serfass Corporation's contribution format Income statement for July appears below. Sales $369,000 Variable expenses 147, 600 Contribution margin 221,400 Fixed expenses 55, 350 Net operating income...
3. The contribution margin ratio increases when A) fixed costs increase. B) fixed costs decrease C) variable costs as a percentage of sales decrease. D) variable costs as a percentage of sales increase.
Which of the following statements about cost-volume-profit analysis is true? To increase the contribution margin ratio, a manager should decrease fixed cost The contribution margin ratio represents the percentage of sales revenue available to contribute towards covering variable and fixed costs If a company expands operations outside of its relevant range, variable cost per unit could change, but total fixed costs will always stay constant ОО At the breakeven point total sales revenue equals total costs
Jilk Inc.'s contribution margin ratio is 60% and its fixed monthly expenses are $42,500. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are $127,000? Escareno Corporation has provided its contribution format income statement for June. The company produces and sells a single product. Sales (8,400 units) Variable expenses Contribution margin Fixed expenses Net operating income $764,400 445,200 319,200 250,900 $ 68,300 If the...
1.What is the contribution margin per unit?
2.What is the contribution margin ratio?
3.What is the variable expense ratio?
4.If sales increase to 1,001 units, what would be the increase
in net operating income?
5.If sales decline to 900 units, what would be the net
operating income?
6.If the selling price increases by $2.50 per unit and the
sales volume decreases by 100 units, what would be the net
operating income?
7.If the variable cost per unit increases by $1.50,...
Multiple Choice Question 43 The contribution margin ratio is O sales divided by fixed expenses. contribution margin divided by sales. O sales divided by variable expenses. sales divided by contribution margin.
Jilk Inc.'s contribution margin ratio is 62% and its fixed monthly expenses are $49,000. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are $140,000?
Creswell Corporation's fixed monthly expenses are $29,000 and its contribution margin ratio is 56%. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are $95,000? Multiple Choice $12,800 $53,200 $24.200 $66,000
Jilk Inc.'s contribution margin ratio is 60% and its fixed monthly expenses are $51,000. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating Income in a month when sales are $144,000? Multiple Choice Ο Ο 586,400 Ο Ο 58, Ο 535,400 Ο Ο $93,000 Serfass Corporation's contribution format Income statement for July appears below. Sales $369,000 Variable expenses 147, 600 Contribution margin 221,400 Fixed expenses 55, 350 Net operating income...
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